Page 19 - Federal Reserve

Fed may change stress tests, says Yellen

The stress tests aim to prove that individual banks can withstand a massive financial crisis

Shares rise 1% on dovish Fed

Rupee strengthens on dollar weakness, 10-year bond yield falls below 7%

Fed's own primary dealers warn shock hike awaits mkts

Last month, Fed Chair Janet Yellen and Vice-Chairman Stanley Fischer hinted that the bank could still raise rates twice this year

What do Fed rate hikes mean for Indian markets?

As the US Federal Reserve (Fed) started its two-day meeting on Tuesday, consensus factors in a no hike in rates from this meet. As the Street awaits the outcome of this meet on Wednesday, a look at the historical correlation between a Fed rate hike and the performance of Indian markets throws some interesting insights."Historical analyses of Indian market returns post US Fed's rate hikes show that equities have tended to do well - market returns were positive in most cases when the US hiking cycle began. Market returns in the immediate run-up to the start of the hiking cycle have been mixed," write analysts at Citigroup in a recent report.Notably, markets fell two per cent on the day of the Fed rate hike in February 1994 but moved in a range-bound manner during the following rate hikes. In the last rate hike on December 15, 2015, markets fell sharply before the hike but inched up 0.7 per cent on the day of the hike. Since this hike, markets surged nearly 13 per cent.A study by Citigrou

Federal Reserve again poised to cut longer-run interest rate forecast

The Fed, however, still insists low interest rates and its large balance sheet of bonds are sufficient to continue bolstering economic growth

Dollar weakens, stocks gain before Fed meeting; oil up

In early trading, benchmark 10-year Treasury notes were up 1/32 in price for a yield of 1.696 per cent, down 0.5 basis point from late on Friday

The Fed is about to make a mistake

Next week, officials at the US Federal Reserve will hold a crucial meeting on whether to raise interest rates. Whatever they do, it will probably be a mistake.More than seven years after the recovery began in mid-2009, inflation remains below the central bank's 2 per cent target, indicating that the economy is still operating below potential. As of July, consumer prices were up just 0.8 per cent from a year earlier. Excluding volatile food and energy goods and services, they were up 1.6 per cent. Worse, markets appear to be losing confidence that the Fed will ever reach its target: Yields on Treasury bonds suggest that traders expect inflation to average less than 2 per cent five to 10 years from now. As the experience of the Bank of Japan indicates, restoring such confidence is not easy.The Fed is also falling short of its goal of "maximum" employment. Although the unemployment rate has returned to its 2007 level of 5 per cent, the fraction of Americans in their prime working years wh

Fed measure to stimulate US economy

The Federal Reserve could push banks to lend more by paying Wall Street smaller returns on money stashed at the US central bank when inflation is low, according to an academic paper presented on Saturday.The proposal was one of several discussed at an international gathering of central bankers who are looking for ways to stimulate economies even after they have cut interest rates to near zero and flooded banks with money.In his paper, economist Ricardo Reis put forward a new way for the Fed to pay banks returns on the money they keep at the central bank, a tool that could potentially put the Fed's goal of keeping inflation at 2 per cent on autopilot.Banks currently have about $2.6 trillion at the Fed, a trove that swelled during a massive Fed bond-buying campaign aimed at fighting the 2007-2009 recession.The Fed currently pays 0.5 per cent on reserves, which some critics view as a giveaway to banks. The central bank uses that rate as a way to keep the rates for overnight interbank borr

Policymakers plan for US Fed shift

Federal Reserve policymakers are signalling they could raise US interest rates soon but they are already weighing new tools they may need to fight the next recession.A solid US labour market "has strengthened" the case for the first rate increase since last December, Fed Chair Janet Yellen told a central banking conference in Jackson Hole, Wyoming. Several of her colleagues said the increase could come as soon as next month if the economy does well.Further rate hikes are expected to be few and far between as the US central bank tries to balance a desire to fuel growth against worries it could overheat the economy.But Fed officials at three-day conference that ended on Saturday also said they need to consider new policy tools for use down the road, such as raising the inflation target or even Fed purchases of non-government-backed assets like corporate debt. Such ideas would test the limits of political feasibility and some would need congressional approval. The view within the Fed is t

Gold to remain soft on US rate hike hope

In London, gold jumped to $1,334 an oz in early Friday trade before falling to $1,321 an oz by the end of the day

Stronger case for Fed rate rise increases volatility in Asia

Increase may boost export competitiveness in some countries

Analysis - For the Fed's Yellen 'conventional' unconventional policy is enough

US economy expanded by just 1.1 per cent in the second quarter of the year, held back in part by stubbornly weak business spending

Case for rate hike has strengthened: Yellen

Yellen also said the economy is "nearing" the Fed's goals of full employment and stable prices

As central bankers gather, some at Fed make interest rate rise case

Not all Fed policymakers are on board for a rate hike soon, traders currently put chances of a Dec rate hike at about 42%

Fed officials tell activists rate hikes won't derail economy

Fed policymakers have yet to decide when to raise rates again after lifting them in December for the first time in nearly a decade

Fed officials push hike case before Chair

Two Federal Reserve officials argued the case for another interest-rate increase in interviews on the eve of an eagerly awaited speech by Chair Janet Yellen in Jackson Hole, Wyoming, that will be scoured for hints of a move that could come as soon as September.Federal Reserve Bank of Kansas City President Esther George, speaking in a Bloomberg Television interview broadcast on Thursday, repeated her case that higher rates were warranted with the US nearing full employment and inflation rising toward the central bank's target.Dallas Fed chief Robert Kaplan separately told CNBC television that "the case is strengthening" for another increase. Yellen speaks at 8 am local time Friday at the Kansas City Fed's annual mountain retreat in Wyoming, which is 10 am in New York.

Federal Reserve under growing pressure to reform system, goals

Janet Yellen, US Federal Reserve Chair, said she believes that diversity is extremely important in all parts of the Federal Reserve

World stocks rise, dollar weakens on divided Federal Reserve

Global bond yields fell with Europe's benchmark, 10-year German yields, down 3 basis points at minus 0.08 per cent

Divided Fed wanted to keep rate 'options open': Minutes

Minutes detailed policy makers' differing views of the economic outlook as they decided to leave a key interest rate untouched at 0.25-0.5%

Fed policymakers divided over whether to raise rates soon: Minutes

Members were generally upbeat about US economic outlook, but some felt more data was needed before rising rates, while a few felt policy needs to be tightened soon